Comments on: Information wants to be expensivehttp://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/
A slice of lime in the sodaSun, 26 Oct 2014 19:05:02 +0000hourly1http://wordpress.org/?v=3.8.3By: cheap facebook fanshttp://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-55166
Thu, 16 Oct 2014 08:39:53 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-55166Hello. For a nice and questioning if spam posts pester authors up to they aggitate readers? I whole-heartedly hope that listing remains without spam indefinitely. Interesting input. I thank you for contribution.
]]>By: facebook fanshttp://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-55100
Tue, 14 Oct 2014 15:19:56 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-55100I had been reading should be genuine, and i also must trust what Tom said.
]]>By: traduceri daneza romanahttp://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-53690
Mon, 29 Sep 2014 14:03:29 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-53690I just could not go away your site prior to suggesting that I really loved the usual info a person provide in your visitors? Is going to be back regularly to check up on new posts
]]>By: Kaleberghttp://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-47657
Wed, 17 Jul 2013 02:41:15 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-47657The various stock exchanges used to boast about offering a level playing field where even the little guy could trade with the big guys without getting unfairly stomped. I remember the talk when my class went to the gallery overlooking the NYSE trading floor, back when you could go there without a pat down and metal search. I remember the old NASDAQ with its old motto: My word is my bond. back when it was a bunch of brokers with note pads and telephones. The markets don’t need the little investors anymore and the little investors don’t need them. Actually, the big investor don’t need them either. The brokers at Vanguard, Fidelity and the other institutional investors all have telephones and note pads these days.
]]>By: SummerDayhttp://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-47654
Tue, 16 Jul 2013 16:27:00 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-47654We need to unpack the two second prerelease to see what’s disgraceful about it. I don’t mean that an information advantage is disgraceful, or that the business of developing and selling information advantages is disgraceful. I mean very specifically that this example is disgraceful.

Start by stipulating that a two second information advantage can only be used by a certain type of firm. That should be easy to see. What kind of firm is it? It is an automated trading firm. And over the last 10 or 15 years these firms – especially the largest among them – have worked with regulators and exchanges to implement and mainstream a variety of regulatory changes and facilities favorable to them that were once unknown, even unimaginable. (I’m writing specifically about the US equities market.)

First is the co-location of their trading computers with exchange computers to minimize communications time; next, the distribution of enriched, private data feeds which describe in great detail what exchange order books look like and detail their dynamic behavior; next, regulatory privileges that allow these firms to print money – quite literally – over short timeframes, giving them unlimited leverage in those timeframes; next, regulatory privileges that allow these firms to short stocks without any of the handcuffs that bind ordinary investors or ordinary broker dealers; next, on some exchanges, order types and trade priorities that favor them; next, the repeal of regulatory obligations these firms once had as a quid pro quo for their privileges.

So these firms start with extraordinary power and reach over any other investors, and what gives them that power is more than just capital investment, it’s regulatory advantage. No ordinary investor, mutual fund, or hedge fund has unlimited leverage in any timeframe at all. Mutual funds can’t short stocks at all; ordinary investors or hedge funds can short stocks, but only if they abide by regulations that are intended to limit the practice (margin requirements and locates for the practitioners out there). As for mutual funds, there’s absolutely nothing they can do, by law, for them to acquire the registrations (licenses) they need to enjoy the privileges these firms have.

All these regulatory advantages and facilities were intended – or so the propaganda said – to allow these firms to make markets, provide liquidity, dampen volatility, and improve competition in the markets.
But here we find these firms using these regulatory advantages and facilities to act as superpredators in the markets. All they need is a two second advantage to position themselves. They put on those positions by taking liquidity and causing volatility. Then they flip those positions as quickly as they can for a profit.

There’s no investment, liquidity provision, volatility dampening, or level playing field here. There is only a very small class of highly privileged and aggressive traders that somehow convinced a news organization to provide – or were convinced by a news organization to buy – an information advantage that they, and only they, were uniquely able to profit from at the direct expense of everyone else.

And that’s why it’s a disgrace.

]]>By: rb6http://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-47652
Mon, 15 Jul 2013 19:06:36 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-47652Felix, They aren’t actually buying the information — they are buying a trading advantage. If you want to go out and tell people that the public markets are stacked against them so don’t bother, then be my guest. I concluded this a decade ago. But the last time I checked there is still an awful lot of money being made when individuals trade. Which is to say, that if you limit the market to “power” buyers and sellers these agents will all buy the so-called trading advantage that is marketed by Reuters or others, at which point it will then cease being an advantage. What they hope for is the gauzy illusion of a level playing field while the reality is an unlevel playing field. It’s a form of arbitrage and no matter how you slice and dice it, the rest of us are reasonable in concluding that there is no reason whatsoever to participate in a market that is so heavily stacked against us. If you’re down with that, then just say so.
]]>By: jimvbhttp://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-47650
Mon, 15 Jul 2013 13:51:22 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-47650Felix,
I think there is something wrong here.
The problem is that the market is now divided into people who have costly information and people who don’t. People who don’t won’t trade on days when this information is released. So people with this information will delay using it, since their profit comes from people without this information. (i.e. This becomes a bluff and double bluff game of poker). Is this how we really want markets to work? There is a fundamental problem – the information is more valuable, the fewer people who have it. And once some people have it, before long everybody will have it. So the information will naturally tend to become more expensive and more exclusive – which is the opposite of the desired effect of informing the market better.
]]>By: rossryanhttp://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-47648
Sun, 14 Jul 2013 07:29:56 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-47648Me thinks you are falling for the magician’s ruse, much like one previous President Bush, who needed to ‘destroy the market to save it.’ It’s a matter of viewpoints, much like the centrifugal force in Physics…your frame of reference, when looking at these market forces, helps make things impossible to understand, or very easy.

Information is information; man wants information to be expensive, since profits are what man seeks, and, in certain misapplications of market algorithms, market segmentation of sorts is the means by which he seeks to make it happen. Or rather, a man wants information to be inexpensive when he is buying, and expensive when he is selling; double so if he is selling to his neighbors.

Now, sometimes information is expensive by consequence: a new chemical formula that creates a drug that cures a bothersome disease -> this is seen as a good thing, and richly rewarded by the market. But sometimes information is expensive by artifice: illegal barriers, political corruption, and broken agreements acting in unison to take public information, much like a public beach, and close it off. That it was not owned by the new owners previously matters little after they have erected barriers around it, and paid off others to spread their deception.

Currently the market, the global market, is suffering a grand tummy-ache, IMHO: it’s not a matter of the new generation not wanting to work, but that the deals that the older generation is offering the new one are so bad, that even the spirit of the market itself is balking at them. The market, which was built upon the idea of voluntary exchange of labor to better mankind, and the free flowing of capital, has been transformed, through relentless corruption, into something approaching a market for slavery -> a lockdown on capital and labor is seen, feudal lords appearing out of the abyss, and mandates that cannot be upheld because it runs contrary to the underpinnings of reality itself. It is as if there was an agreement that the market be instituted properly…then everyone began running overrides on it, because they grew skittish that the high places they started out at were not being maintained; as such, once you issue an override, as has been done, you are no longer operating in a market economy, but a political one. I liken it to the Model-View-Controller design in the programming world, where once you break the design (by introducing some non-MVC controls, for instance), you are no longer doing MVC.

]]>By: realist50http://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-47644
Sat, 13 Jul 2013 21:00:43 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-47644I agree with Felix’s broad point, but I was troubled by the example of the appliance manufacturers’ survey, because it sounds like the shipment information comes from public company manufacturers themselves. It is aggregated, but I still view it as different than information derived from surveying the public or even sales channel surveys of customers and distributors.
]]>By: TomLindmarkhttp://blogs.reuters.com/felix-salmon/2013/07/12/information-wants-to-be-expensive/comment-page-1/#comment-47641
Sat, 13 Jul 2013 01:28:01 +0000http://blogs.reuters.com/felix-salmon/?p=22245#comment-47641Great article, Felix. The only issue I would take with it is that even in 1930 information was asymmetrical. I suspect that even then the drafters of the law didn’t really believe a level playing field was possible.
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